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Letter from the Executive Director Steven K. Snyder
A publication of the Oklahoma Police Pension and Retirement System
Spring/Summer 2011
PROTECT
AND
SERVE
The Board of Trustees
Tom Custer
District 1
Craig Akard
District 2
Rick Smith
District 3
Jimmy Keesee
District 4
Jeff Cealka
District 5
Randy Scott
District 6
W. B. Smith
District 7
Tony Davenport
Oklahoma Municipal
League Appointee
Charles Kerr
Speaker of the House
Appointee
Susan Knight
Senate President Pro
Tempore Appointee
Brandy Manek
Director of State
Finance Designee
Andy McPherson
Governor’s Appointee
Frank Stone
Insurance Commissioner
Designee
Inside this Issue:
The Oklahoma Legislature adjourned
sine die on May 20, 2011. This session has
been one filled with changes that affected not
only the Oklahoma Police Pension and Retire-ment
System (OPPRS), but all of the state re-tirement
systems. The pension reform legisla-tion
bills that will have an impact upon our
System are House Bill 2132 (HB 2132) and
Senate Bill 347 (SB 347). Please see summa-ries
of the bills on page 2.
There were numerous other legislative bills that were introduced this legisla-tive
session that would have affected the OPPRS, but none of these bills
were passed out of the legislature. A positive for OPPRS is that the funded
status increased from approximately 75% to approximately 91%, as of July 1,
2010.
I am sure that you are aware that there will be no Cost of Living Adjustment
(COLA) this year. With House Bill 2132 in place, no future COLA’s will be
granted unless there is concurrent funding provided to pay for the COLA. We
will keep you apprised of developments as the year progresses.
Have a happy and safe summer season.
REMINDER
Web Member Services does not list beneficiary
information because beneficiaries are
determined by statute
Bills 2
Pension Education Info 2-4
ASAP—ACG 5
On the Horizon 6
Member Cities 7
Unemployment Data 8
Consultant’s Corner 9
Page 2 Protect and Serve
HB 2132
HB 2132 creates the Truth in Funding Act. The bill removes cost of living adjustments for the definition of “non-fiscal
retirement bills”. The bill also removes provisions requiring an actuarial analysis of cost of living adjustments and adds
language that provides that a retirement bill having a fiscal impact will be considered only if the Legislature provides the
funding determined by the legislative actuary in an amount equal to or exceeding the annual normal cost to the retire-ment
system resulting from the bill being enacted.
The bill also provides that no retirement will adopt a cost of living actuarial assumption or cause an assumption to be
included in any actuarial valuation. The bill also prohibits a bill from taking effect if the State Board of Equalization de-termines
that any retirement bill having a fiscal impact does not have concurrent funding. The bill also provides that the
bill may not be administered by the retirement system. The bill goes into effect August 25, 2011.
SB 347
SB347 requires that any municipal officer or employee forfeit their retirement benefits upon final conviction of or plead-ing
guilty or nolo contendere to a felony for bribery, corruption, forgery or perjury or any other crime related to their office
or employment. The bill exempts from the forfeiture of their retirement benefits officers or employees who receive a de-ferred
sentence, but requires that benefit not begin prior to completion of the deferred sentence. The bill also estab-lishes
that the forfeiture will not include the officer or employee’s contributions to the retirement system or benefits that
are vested at the time of the effective date of the law. The bill requires that the forfeiture continue until the conviction of
guilty plea is reversed by the highest appellate court to which the officer or employee may appeal. The bill also requires
the prosecuting attorney to notify the retirement system in which the officer or employee is enrolled and requires the re-tirement
system to immediately suspend all benefits and to notify the officer or employee of their right to a hearing to
review whether the conviction or plea meets the qualifications for forfeiture. The bill permits the retirement system to
investigate, gather court documents and contact prosecutors to determine if a conviction or plea meets the qualifications
for forfeiture. The bill applies to municipal retirement systems, Oklahoma Firefighters Pension and Retirement System,
the Oklahoma Police Pension and Retirement System, and the Oklahoma Public Employees Retirement System. The
bill takes effect on Aug 25, 2011.
PENSION EDUCATIONAL INFORMATION
APRIL 2011
To ensure stakeholders have accurate data and context, below is a snapshot summary of fact‐based information
regarding public pensions that can be provided to interested parties.
 Pensions are durable and recovering from the Wall Street financial crisis that impacted all investors.
Like all investors, public and private sector pensions realized investment losses with the recent historic market decline.
Public pensions saw their holdings fall in value by $889 billion between 2007 and 2008. Aggregate funding levels of the
nation’s largest public pension plans shifted from 85% in 2008 to 80% in 2009—a level that most experts agree is ade‐quate
for long‐term pension sustainability. Since that time, as the stock market has rebounded, so has the value of
pension funds and most plans are well positioned to recover. At the end of calendar year 2010, aggregate state and
local government retirement system assets totaled nearly $3 trillion, a 35% increase from the low point of the market
collapse. These asset levels are nearly 25% higher than on June 30, 2009 – a date that some studies rely upon to por‐tray
the financial condition of public pensions.
Since then, investment returns have rebounded sharply and states have adopted changes to benefits levels and financ‐ing
structures that have had a positive impact on pension trusts. (Source: National Association of State Retirement Ad‐ministrators,
“Strong Investment Gains and Legislative Changes Speeding Public Pension Recovery,” April 2011)
Spring/Summer 2011 Page 3
 Public pension systems across the country are actively making changes to ensure their long‐term
sustainability.
In response to the market downturn, state and local government have taken substantive and varied actions to modify
their pension plans. In fact, more changes were enacted in 2010 than in any other year in recent history.
In the past few years, nearly two‐thirds of states have made changes to benefit levels, contribution rate structures, or
both. From coast to coast, changes have included increasing employee contributions; changing the benefit multiplier or
final average pay calculation; increasing the age and service requirements; implementing anti‐spiking provisions; modi‐fying
post‐retirement increases; and increasing the vesting time period. (Source: National Conference of State Legisla‐tures,
“Pensions And Retirement Plan Enactments In 2010 State Legislatures,” November 2010)
 Public pensions are prudent investors, and continue to utilize investment return assumptions that are
realistic and minimize taxpayer costs.
During the 25‐year period ending December 31, 2010, the major pension plans averaged approximately 9% a year in
investment returns, according to Callan Associates. This period includes three recessions, including the stock market
decline of 2008‐ 2009. Because most funds assumed an investment return of 8% or less, taxpayers were the beneficiar‐ies
of the positive returns, as contributions to pension funds were less than actuarially projected during this 25‐year
period.
In addition, Standard and Poor’s concluded that in calendar year 2009, pension funds on aggregate reported a 19.5%
return on investment. In 2010, funds that have reported investments are typically reporting gains in the 13% to 15%
range. Since 2003, the average aggregate pension fund earnings have exceeded the typically assumed benchmark of
8% per year every year except 2008, the year of the market crash.
Moreover, studies show that public pensions are prudent investors in both bull and bear markets. They consistently
exhibit prudent investment behavior, adopt best investment practices, and avoid moral hazard. (Source: National Insti‐tution
Retirement Security, “In it for the Long Haul: The Investment Behavior of Public Pensions,” November 2008)
 Public pensions are a small portion of state budgets, and closing funding gaps is manageable.
According to the Center on Budget and Policy Priorities, states and localities devote an average of 3.8 percent of their
operating budgets to pension funding. In most states, a modest increase in funding and/or sensible changes to pension
eligibility and benefits should be sufficient to remedy funding.
The Center for Retirement Research at Boston College projects that if total contributions increase by just 2.2 percent of
payrolls on average, state and local governments can pay off the total unfunded liabilities in 30 years. Moreover, states
are continuing to make most, if not all, of their annual required contributions (ARCs) to the pension funds. In 2009, an
average of 88% of the ARC was paid by the largest state and local retirement systems in the country. States that have
kept up with their payments will be able to make minor adjustments to keep the plan healthy, while states that
showed less funding discipline before the downturn will likely face greater challenges.
 Pension spending creates jobs and economic stimulus in virtually every jurisdiction across the nation.
Public employees and retirees live in every city and county in the nation. The $175 billion in annual benefit distribu‐tions
from pension trusts are a critical source of economic stimulus to communities throughout the nation, and act as
an economic stabilizer in difficult financial times.
Recent studies find that expenditures made from state and local pension benefits had a total economic impact of more
than $358 billion; supported more than 2.5 million American jobs that paid more than $92 billion in total compensation
to American workers; and supported more than $57 billion in annual federal, state, local tax revenue. The expenditures
also had large multiplier effects. Each taxpayer dollar invested in state and local pensions supported $11.45 in total
economic activity, while each dollar paid out in benefits supported $2.36 in economic activity. (Source: The National
Institute on Retirement Security, “Pensionomics: Measuring the Economic Impact of State and Local Pension Plans,”
February 2009)
Page 4 Protect and Serve
 Pensions remain the most economically efficient way to provide modest retirement benefits to em‐ployees.
The average public sector retirement benefit is about $1,900 per month. The benefits typically are funded using a
shared approach, with employers, employees, and investment returns contributing to the pension trust.
Moreover, a recent study finds that a pension is the most economically efficient means of delivering retirement in‐come—
half the cost of a defined contribution account. Pensions are efficient because they avoid the problem of
“over‐saving” by pooling longevity risks, maintaining an optimally balanced investment portfolio, and achieving higher
investment returns as compared to individual investors, because of professional asset management and lower fees.
(Source: The National Institute on Retirement Security, “A Better Bang for the Buck: The Economic Efficiencies of De‐fined
Benefit Pension Plans,” August 2008)
 Traditional pensions remain the most effective way for middle‐class Americans to achieve financial se‐curity
and self‐sufficiency in retirement.
Poverty among older households lacking pension income is six times greater than those with pension income. An esti‐mated
1.4 million fewer Americans rely on public assistance because of the stable retirement income provided by tradi‐tional
pensions.
Without this pension income, there would be a 40% increase in the number of older households receiving public assis‐tance,
at a cost of some $7.3 billion in additional public assistance expenditures. (Source: The National Institute on Re‐tirement
Security, “The Pension Factor: Assessing the Role of Defined Benefit Plans in Reducing Elder Hardships,” July
2009)
 Americans are highly anxious about their retirement prospects, and view pensions as a solution.
A national poll revealed that some 84% of Americans are concerned that current economic conditions are impacting
their ability to achieve a secure retirement, with more than half (54%) of Americans very concerned. More than 80% of
Americans believe that recent economic downturn exposed the risks of America’s retirement system, with nearly three
quarters indicating that stock market volatility makes it impossible for the average American to predict how much
money they will have in their nest egg when they retire.
Americans view pensions as reliable, and a solution to relieving retirement anxiety. Some 83% of Americans indicated
that those with pensions are more likely to have a secure retirement, and 72% of those who have a pension are confi‐dent
it will be there at retirement. Moreover, 75% believe the disappearance of pensions has made it harder to achieve
the “American Dream.” (Source: National Institute on Retirement Security, “Pensions and Retirement Security 2011: A
Roadmap for Policymakers,” March 2011)
Reminder to all members
 Vesting is NOT automatic, in order to elect a vested benefit, the applicant must submit
the Application for Vested Benefit. (Form 108)
 Any retiree or beneficiary wishing to add, change, or terminate an insurance premium
deduction must submit a Health Election Change. (Form 135)
Forms are available on our website, and will also be provided upon request.
www.opprs.ok.gov
Spring/Summer 2011 Page 5
1 Total Fund includes $709,116 for illiquid securities in terminated account with Overseas CAP Partners and $10,826 in remaining investment in Prudential
Timber.
2 The Policy Index is comprised of the following indices: 55% Russell 3000, 35% Barclays Capital Universal, and 10% MSCI EAFE as of June 1, 2007. Prior to that
the Policy Index was compromised of the following indices: 55% Russell 3000, 35% Barclays capital Aggregate, and 10% MSCI EAFE.
Page 6 Protect and Serve
On the Horizon
What is going to happen next year?
Most, if not all, of the following possible changes will, in all probability, be effective for new hires only. It
should not affect current members of the Oklahoma Police Pension and Retirement System.
Rest assured, your Board of Trustees and the staff of the System are providing information to the legisla-ture
advising them that the System is in good shape and that there should be no changes imposed upon
the System.
No one knows for certain, but here are some areas of the public pension systems that the Legislature
may be looking at to-wit:
1. Deferred Retirement Option Plan (DROP);
2. Beneficiary benefits;
3. Contribution rates.
1. As for the DROP benefit, the legislature may look at the 7.5% minimum rate of return on the DROP ac-count
balances. One option is to lower the rate, while another option is to set the rate at the same rate of
return of the System. There is also consideration to continue the member's 8% contribution to the Sys-tem
after the member enters the forward or back DROP. In addition, they are looking at the entire em-ployer
contributions remaining with the System (currently ½ of cities’ contributions is paid into member’s
DROP account).
2. Currently, the beneficiary of a deceased member receives 100% of the members monthly pension
benefit. The Legislature is looking at reducing that amount to 50%, in alignment with the benefit a benefi-ciary
in the Armed Forces receives.
3. Currently the contribution rates for the System is 8% employee contribution and 13% employer contri-bution.
The Legislature may look at increasing the contribution rates of the System.
Election Results
District 3—Rick Smith, Broken Arrow
District 6 - Randy Scott, Oklahoma City
Serving 3 year terms, beginning July 1, 2011
Spring/Summer 2011 Page 7
Active Membership by City/Town
(as of June 13, 2011)
Ada 33 Drumright 6 Madill 11 Sand Springs 29
Altus 45 Duncan 45 Mangum 6 Sapulpa 43
Alva 9 Durant 37 Mannford 6 Sawyer 0
Anadarko 16 Edmond 107 Marlow 8 Sayre 7
Arapaho 0 El Reno 26 McAlester 41 Seminole 11
Ardmore 44 Elk City 25 Miami 26 Shawnee 53
Atoka 15 Enid 90 Midwest City 93 Skiatook 18
Bartlesville 48 Eufaula 11 Moore 74 Spencer 8
Bethany 29 Forest Park 4 Muskogee 85 Stigler 7
Bixby 23 Fort Gibson 8 Mustang 19 Stillwater 74
Blackwell 17 Frederick 11 Newcastle 16 Sulphur 10
Blair 0 Garber 0 Newkirk 5 Tahlequah 30
Boynton 0 Glenpool 18 Nichols Hills 14 Tecumseh 7
Bristow 7 Grandfield 0 Nicoma Park 6 The Village 20
Broken Arrow 114 Granite 1 Noble 10 Tishomingo 6
Catoosa 11 Grove 18 Norman 158 Tonkawa 7
Chandler 7 Guthrie 20 Nowata 4 Tulsa 763
Checotah 9 Guymon 16 Okeene 1 Tuttle 8
Chickasha 25 Harrah 8 Oklahoma City 973 Valley Brook 0
Choctaw 10 Haskell 5 Okmulgee 23 Vinita 15
Claremore 39 Henryetta 11 Owasso 44 Warner 4
Cleveland 3 Hinton 4 Pauls Valley 15 Warr Acres 21
Clinton 15 Hobart 8 Pawhuska 7 Watonga 5
Collinsville 9 Hominy 3 Perkins 5 Waurika 0
Commerce 2 Hugo 15 Perry 13 Weatherford 19
Coweta 14 Idabel 17 Piedmont 8 Weleetka 1
Cromwell 0 Jenks 17 Ponca City 51 Wetumka 5
Cushing 15 Jones 5 Poteau 24 Wewoka 8
Davis 5 Kingfisher 7 Prague 6 Wister 1
Del City 28 Krebs 7 Pryor 22 Woodward 22
Dewey 8 Lawton 179 Purcell 16 Yukon 38
Disney 0 Lexington 0 Ringling 2
Drummond 9 Lindsay 6 Sallisaw 22
Page 8 Protect and Serve
Measure
Not seasonally
adjusted Seasonally adjusted
Apr.
2010
Mar.
2011
Apr.
2011
Apr.
2010
Dec.
2010
Jan.
2010
Feb.
2010
Mar.
2011
Apr.
2011
U-1 Persons unemployed 15 weeks or longer, as a
percent of the civilian labor force 6.3 5.7 5.5 5.8 5.6 5.5 5.3 5.3 5.1
U-2 Job losers and persons who completed tempo-rary
jobs, as a percent of the civilian labor force 5.9 5.8 5.2 6.0 5.8 5.6 5.4 5.4 5.3
U-3 Total unemployed, as a percent of the civilian
labor force (official unemployment rate) 9.5 9.2 8.7 9.8 9.4 9.0 8.9 8.8 9.0
U-4 Total unemployed plus discouraged workers,
as a percent of the civilian labor force plus dis-couraged
workers
10.2 9.7 9.2 10.5 10.2 9.6 9.5 9.4 9.5
U-5 Total unemployed, plus discouraged workers,
plus all other persons marginally attached to the
labor force, as a percent of the civilian labor force
plus all persons marginally attached to the labor
force
10.9 10.6 10.1 11.2 10.9 10.7 10.5 10.3 10.4
U-6 Total unemployed, plus all persons marginally
attached to the labor force, plus total employed
part time for economic reasons, as a percent of
the civilian labor force plus all persons marginally
attached to the labor force
16.6 16.2 15.5 17.0 16.7 16.1 15.9 15.7 15.9
NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indi-cate
that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged work-ers,
a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons
employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a
part-time schedule. Updated population controls are introduced annually with the release of January data.
Bureau of Labor Statistics
Unemployment Data
Source: US Department of Labor, Bureau of Labor Statistics http://www.bls.gov/news.release/empsit.t15.htm
Remember to keep us updated with your
current mailing address!!!!
Forms available on our website:
www.opprs.ok.gov or by calling our
office at (405) 840-3555.
Spring/Summer 2011 Page 9
Diversifying Your Investments
Historically, a common investment approach has been to invest a portion of your assets in international
equities as a means of reducing the overall volatility (risk) of your portfolio. As the correlation between
U.S. and international stocks has risen over recent years, investors have questioned if the benefits of in-vesting
in international markets are worth the risks. Investment markets have become more global than
ever, emphasizing that investing in international markets can play an important role in a long-term portfo-lio.
Below are a few reasons why it is important to consider investing a portion of your portfolio in non-US
assets.
Non-U.S. equities account for approximately 60% of global market capitalization, thus representing a
significant opportunity set for U.S. investors.
An investor who limits themselves to only U.S. equities excludes more than one-half of the global op-portunity
set.
U.S. stocks are impacted primarily by U.S. economic and market forces while companies domiciled
outside of the U.S. are exposed to different economic and market factors.
Over longer periods of time, investors can increase a portfolio’s potential return & reduced risk by
adding a non-U.S. equity allocation to the portfolio.
Exposure to different currencies can significantly affect the returns for U.S.-based investors. In 2009
and 2010, U.S.-based investors benefitted from the weakness of the U.S. dollar.
Emerging economies are projected to grow faster than developed economies. By 2013 more than
50% of the Global GDP is expected to come from emerging economies.
Non-U.S. equity markets are typically less efficient than U.S. markets, presenting more potential in-vestment
opportunities for investors.
The U.S. equity market has topped the performance charts only once since 1998.
While there is no right answer for all investors, research suggests having an allocation to international
equities can be beneficial to long-term portfolios; the percentage allocated will depend upon the individ-ual
investor profile, risk tolerance, and other unique considerations.
Consultant’s Corner
This is a regular feature in the newsletter from Asset Consulting Group, the financial consultant to the Oklahoma Police
Pension and Retirement System.
CONTACT OPPRS
Mailing Address:
Oklahoma Police Pension & Retirement System
1001 NW 63rd Street, Suite 305
Oklahoma City, OK 73116-7335
Local Phone: (405) 840-3555
Toll Free Phone: (800) 347-6552
Fax: (405) 840-8465
Website: www.opprs.ok.gov
This publication, printed by the Department of Central Services, Central
Printing, is issued by the Oklahoma Police Pension and Retirement Sys-tem
as authorized by its Executive Director. Seven thousand five hun-dred
copies have been printed at a cost of $3135.00. Copies have been
deposited with the Publications Clearinghouse of the Oklahoma
Department of Libraries.
This newsletter is for informational purposes only. Individual
requirements and benefits may differ, depending on circumstances.
Consult the plan provisions or OPPRS for detailed information.
Oklahoma Police Pension and Retirement System Staff
Front row (L-R), Andrea Houston, Judy Cong, Liz Moore,
Dusty Brassfield, Katie Luttrell. Back row, Sean Ruark,
Darcie Gordon, Steve Snyder, Debbie Kearns, Nancy Neth-ercutt,
Marla Hensley
1001 NW 63rd Street, Suite 305
Oklahoma City, OK 73116-7335

Letter from the Executive Director Steven K. Snyder
A publication of the Oklahoma Police Pension and Retirement System
Spring/Summer 2011
PROTECT
AND
SERVE
The Board of Trustees
Tom Custer
District 1
Craig Akard
District 2
Rick Smith
District 3
Jimmy Keesee
District 4
Jeff Cealka
District 5
Randy Scott
District 6
W. B. Smith
District 7
Tony Davenport
Oklahoma Municipal
League Appointee
Charles Kerr
Speaker of the House
Appointee
Susan Knight
Senate President Pro
Tempore Appointee
Brandy Manek
Director of State
Finance Designee
Andy McPherson
Governor’s Appointee
Frank Stone
Insurance Commissioner
Designee
Inside this Issue:
The Oklahoma Legislature adjourned
sine die on May 20, 2011. This session has
been one filled with changes that affected not
only the Oklahoma Police Pension and Retire-ment
System (OPPRS), but all of the state re-tirement
systems. The pension reform legisla-tion
bills that will have an impact upon our
System are House Bill 2132 (HB 2132) and
Senate Bill 347 (SB 347). Please see summa-ries
of the bills on page 2.
There were numerous other legislative bills that were introduced this legisla-tive
session that would have affected the OPPRS, but none of these bills
were passed out of the legislature. A positive for OPPRS is that the funded
status increased from approximately 75% to approximately 91%, as of July 1,
2010.
I am sure that you are aware that there will be no Cost of Living Adjustment
(COLA) this year. With House Bill 2132 in place, no future COLA’s will be
granted unless there is concurrent funding provided to pay for the COLA. We
will keep you apprised of developments as the year progresses.
Have a happy and safe summer season.
REMINDER
Web Member Services does not list beneficiary
information because beneficiaries are
determined by statute
Bills 2
Pension Education Info 2-4
ASAP—ACG 5
On the Horizon 6
Member Cities 7
Unemployment Data 8
Consultant’s Corner 9
Page 2 Protect and Serve
HB 2132
HB 2132 creates the Truth in Funding Act. The bill removes cost of living adjustments for the definition of “non-fiscal
retirement bills”. The bill also removes provisions requiring an actuarial analysis of cost of living adjustments and adds
language that provides that a retirement bill having a fiscal impact will be considered only if the Legislature provides the
funding determined by the legislative actuary in an amount equal to or exceeding the annual normal cost to the retire-ment
system resulting from the bill being enacted.
The bill also provides that no retirement will adopt a cost of living actuarial assumption or cause an assumption to be
included in any actuarial valuation. The bill also prohibits a bill from taking effect if the State Board of Equalization de-termines
that any retirement bill having a fiscal impact does not have concurrent funding. The bill also provides that the
bill may not be administered by the retirement system. The bill goes into effect August 25, 2011.
SB 347
SB347 requires that any municipal officer or employee forfeit their retirement benefits upon final conviction of or plead-ing
guilty or nolo contendere to a felony for bribery, corruption, forgery or perjury or any other crime related to their office
or employment. The bill exempts from the forfeiture of their retirement benefits officers or employees who receive a de-ferred
sentence, but requires that benefit not begin prior to completion of the deferred sentence. The bill also estab-lishes
that the forfeiture will not include the officer or employee’s contributions to the retirement system or benefits that
are vested at the time of the effective date of the law. The bill requires that the forfeiture continue until the conviction of
guilty plea is reversed by the highest appellate court to which the officer or employee may appeal. The bill also requires
the prosecuting attorney to notify the retirement system in which the officer or employee is enrolled and requires the re-tirement
system to immediately suspend all benefits and to notify the officer or employee of their right to a hearing to
review whether the conviction or plea meets the qualifications for forfeiture. The bill permits the retirement system to
investigate, gather court documents and contact prosecutors to determine if a conviction or plea meets the qualifications
for forfeiture. The bill applies to municipal retirement systems, Oklahoma Firefighters Pension and Retirement System,
the Oklahoma Police Pension and Retirement System, and the Oklahoma Public Employees Retirement System. The
bill takes effect on Aug 25, 2011.
PENSION EDUCATIONAL INFORMATION
APRIL 2011
To ensure stakeholders have accurate data and context, below is a snapshot summary of fact‐based information
regarding public pensions that can be provided to interested parties.
 Pensions are durable and recovering from the Wall Street financial crisis that impacted all investors.
Like all investors, public and private sector pensions realized investment losses with the recent historic market decline.
Public pensions saw their holdings fall in value by $889 billion between 2007 and 2008. Aggregate funding levels of the
nation’s largest public pension plans shifted from 85% in 2008 to 80% in 2009—a level that most experts agree is ade‐quate
for long‐term pension sustainability. Since that time, as the stock market has rebounded, so has the value of
pension funds and most plans are well positioned to recover. At the end of calendar year 2010, aggregate state and
local government retirement system assets totaled nearly $3 trillion, a 35% increase from the low point of the market
collapse. These asset levels are nearly 25% higher than on June 30, 2009 – a date that some studies rely upon to por‐tray
the financial condition of public pensions.
Since then, investment returns have rebounded sharply and states have adopted changes to benefits levels and financ‐ing
structures that have had a positive impact on pension trusts. (Source: National Association of State Retirement Ad‐ministrators,
“Strong Investment Gains and Legislative Changes Speeding Public Pension Recovery,” April 2011)
Spring/Summer 2011 Page 3
 Public pension systems across the country are actively making changes to ensure their long‐term
sustainability.
In response to the market downturn, state and local government have taken substantive and varied actions to modify
their pension plans. In fact, more changes were enacted in 2010 than in any other year in recent history.
In the past few years, nearly two‐thirds of states have made changes to benefit levels, contribution rate structures, or
both. From coast to coast, changes have included increasing employee contributions; changing the benefit multiplier or
final average pay calculation; increasing the age and service requirements; implementing anti‐spiking provisions; modi‐fying
post‐retirement increases; and increasing the vesting time period. (Source: National Conference of State Legisla‐tures,
“Pensions And Retirement Plan Enactments In 2010 State Legislatures,” November 2010)
 Public pensions are prudent investors, and continue to utilize investment return assumptions that are
realistic and minimize taxpayer costs.
During the 25‐year period ending December 31, 2010, the major pension plans averaged approximately 9% a year in
investment returns, according to Callan Associates. This period includes three recessions, including the stock market
decline of 2008‐ 2009. Because most funds assumed an investment return of 8% or less, taxpayers were the beneficiar‐ies
of the positive returns, as contributions to pension funds were less than actuarially projected during this 25‐year
period.
In addition, Standard and Poor’s concluded that in calendar year 2009, pension funds on aggregate reported a 19.5%
return on investment. In 2010, funds that have reported investments are typically reporting gains in the 13% to 15%
range. Since 2003, the average aggregate pension fund earnings have exceeded the typically assumed benchmark of
8% per year every year except 2008, the year of the market crash.
Moreover, studies show that public pensions are prudent investors in both bull and bear markets. They consistently
exhibit prudent investment behavior, adopt best investment practices, and avoid moral hazard. (Source: National Insti‐tution
Retirement Security, “In it for the Long Haul: The Investment Behavior of Public Pensions,” November 2008)
 Public pensions are a small portion of state budgets, and closing funding gaps is manageable.
According to the Center on Budget and Policy Priorities, states and localities devote an average of 3.8 percent of their
operating budgets to pension funding. In most states, a modest increase in funding and/or sensible changes to pension
eligibility and benefits should be sufficient to remedy funding.
The Center for Retirement Research at Boston College projects that if total contributions increase by just 2.2 percent of
payrolls on average, state and local governments can pay off the total unfunded liabilities in 30 years. Moreover, states
are continuing to make most, if not all, of their annual required contributions (ARCs) to the pension funds. In 2009, an
average of 88% of the ARC was paid by the largest state and local retirement systems in the country. States that have
kept up with their payments will be able to make minor adjustments to keep the plan healthy, while states that
showed less funding discipline before the downturn will likely face greater challenges.
 Pension spending creates jobs and economic stimulus in virtually every jurisdiction across the nation.
Public employees and retirees live in every city and county in the nation. The $175 billion in annual benefit distribu‐tions
from pension trusts are a critical source of economic stimulus to communities throughout the nation, and act as
an economic stabilizer in difficult financial times.
Recent studies find that expenditures made from state and local pension benefits had a total economic impact of more
than $358 billion; supported more than 2.5 million American jobs that paid more than $92 billion in total compensation
to American workers; and supported more than $57 billion in annual federal, state, local tax revenue. The expenditures
also had large multiplier effects. Each taxpayer dollar invested in state and local pensions supported $11.45 in total
economic activity, while each dollar paid out in benefits supported $2.36 in economic activity. (Source: The National
Institute on Retirement Security, “Pensionomics: Measuring the Economic Impact of State and Local Pension Plans,”
February 2009)
Page 4 Protect and Serve
 Pensions remain the most economically efficient way to provide modest retirement benefits to em‐ployees.
The average public sector retirement benefit is about $1,900 per month. The benefits typically are funded using a
shared approach, with employers, employees, and investment returns contributing to the pension trust.
Moreover, a recent study finds that a pension is the most economically efficient means of delivering retirement in‐come—
half the cost of a defined contribution account. Pensions are efficient because they avoid the problem of
“over‐saving” by pooling longevity risks, maintaining an optimally balanced investment portfolio, and achieving higher
investment returns as compared to individual investors, because of professional asset management and lower fees.
(Source: The National Institute on Retirement Security, “A Better Bang for the Buck: The Economic Efficiencies of De‐fined
Benefit Pension Plans,” August 2008)
 Traditional pensions remain the most effective way for middle‐class Americans to achieve financial se‐curity
and self‐sufficiency in retirement.
Poverty among older households lacking pension income is six times greater than those with pension income. An esti‐mated
1.4 million fewer Americans rely on public assistance because of the stable retirement income provided by tradi‐tional
pensions.
Without this pension income, there would be a 40% increase in the number of older households receiving public assis‐tance,
at a cost of some $7.3 billion in additional public assistance expenditures. (Source: The National Institute on Re‐tirement
Security, “The Pension Factor: Assessing the Role of Defined Benefit Plans in Reducing Elder Hardships,” July
2009)
 Americans are highly anxious about their retirement prospects, and view pensions as a solution.
A national poll revealed that some 84% of Americans are concerned that current economic conditions are impacting
their ability to achieve a secure retirement, with more than half (54%) of Americans very concerned. More than 80% of
Americans believe that recent economic downturn exposed the risks of America’s retirement system, with nearly three
quarters indicating that stock market volatility makes it impossible for the average American to predict how much
money they will have in their nest egg when they retire.
Americans view pensions as reliable, and a solution to relieving retirement anxiety. Some 83% of Americans indicated
that those with pensions are more likely to have a secure retirement, and 72% of those who have a pension are confi‐dent
it will be there at retirement. Moreover, 75% believe the disappearance of pensions has made it harder to achieve
the “American Dream.” (Source: National Institute on Retirement Security, “Pensions and Retirement Security 2011: A
Roadmap for Policymakers,” March 2011)
Reminder to all members
 Vesting is NOT automatic, in order to elect a vested benefit, the applicant must submit
the Application for Vested Benefit. (Form 108)
 Any retiree or beneficiary wishing to add, change, or terminate an insurance premium
deduction must submit a Health Election Change. (Form 135)
Forms are available on our website, and will also be provided upon request.
www.opprs.ok.gov
Spring/Summer 2011 Page 5
1 Total Fund includes $709,116 for illiquid securities in terminated account with Overseas CAP Partners and $10,826 in remaining investment in Prudential
Timber.
2 The Policy Index is comprised of the following indices: 55% Russell 3000, 35% Barclays Capital Universal, and 10% MSCI EAFE as of June 1, 2007. Prior to that
the Policy Index was compromised of the following indices: 55% Russell 3000, 35% Barclays capital Aggregate, and 10% MSCI EAFE.
Page 6 Protect and Serve
On the Horizon
What is going to happen next year?
Most, if not all, of the following possible changes will, in all probability, be effective for new hires only. It
should not affect current members of the Oklahoma Police Pension and Retirement System.
Rest assured, your Board of Trustees and the staff of the System are providing information to the legisla-ture
advising them that the System is in good shape and that there should be no changes imposed upon
the System.
No one knows for certain, but here are some areas of the public pension systems that the Legislature
may be looking at to-wit:
1. Deferred Retirement Option Plan (DROP);
2. Beneficiary benefits;
3. Contribution rates.
1. As for the DROP benefit, the legislature may look at the 7.5% minimum rate of return on the DROP ac-count
balances. One option is to lower the rate, while another option is to set the rate at the same rate of
return of the System. There is also consideration to continue the member's 8% contribution to the Sys-tem
after the member enters the forward or back DROP. In addition, they are looking at the entire em-ployer
contributions remaining with the System (currently ½ of cities’ contributions is paid into member’s
DROP account).
2. Currently, the beneficiary of a deceased member receives 100% of the members monthly pension
benefit. The Legislature is looking at reducing that amount to 50%, in alignment with the benefit a benefi-ciary
in the Armed Forces receives.
3. Currently the contribution rates for the System is 8% employee contribution and 13% employer contri-bution.
The Legislature may look at increasing the contribution rates of the System.
Election Results
District 3—Rick Smith, Broken Arrow
District 6 - Randy Scott, Oklahoma City
Serving 3 year terms, beginning July 1, 2011
Spring/Summer 2011 Page 7
Active Membership by City/Town
(as of June 13, 2011)
Ada 33 Drumright 6 Madill 11 Sand Springs 29
Altus 45 Duncan 45 Mangum 6 Sapulpa 43
Alva 9 Durant 37 Mannford 6 Sawyer 0
Anadarko 16 Edmond 107 Marlow 8 Sayre 7
Arapaho 0 El Reno 26 McAlester 41 Seminole 11
Ardmore 44 Elk City 25 Miami 26 Shawnee 53
Atoka 15 Enid 90 Midwest City 93 Skiatook 18
Bartlesville 48 Eufaula 11 Moore 74 Spencer 8
Bethany 29 Forest Park 4 Muskogee 85 Stigler 7
Bixby 23 Fort Gibson 8 Mustang 19 Stillwater 74
Blackwell 17 Frederick 11 Newcastle 16 Sulphur 10
Blair 0 Garber 0 Newkirk 5 Tahlequah 30
Boynton 0 Glenpool 18 Nichols Hills 14 Tecumseh 7
Bristow 7 Grandfield 0 Nicoma Park 6 The Village 20
Broken Arrow 114 Granite 1 Noble 10 Tishomingo 6
Catoosa 11 Grove 18 Norman 158 Tonkawa 7
Chandler 7 Guthrie 20 Nowata 4 Tulsa 763
Checotah 9 Guymon 16 Okeene 1 Tuttle 8
Chickasha 25 Harrah 8 Oklahoma City 973 Valley Brook 0
Choctaw 10 Haskell 5 Okmulgee 23 Vinita 15
Claremore 39 Henryetta 11 Owasso 44 Warner 4
Cleveland 3 Hinton 4 Pauls Valley 15 Warr Acres 21
Clinton 15 Hobart 8 Pawhuska 7 Watonga 5
Collinsville 9 Hominy 3 Perkins 5 Waurika 0
Commerce 2 Hugo 15 Perry 13 Weatherford 19
Coweta 14 Idabel 17 Piedmont 8 Weleetka 1
Cromwell 0 Jenks 17 Ponca City 51 Wetumka 5
Cushing 15 Jones 5 Poteau 24 Wewoka 8
Davis 5 Kingfisher 7 Prague 6 Wister 1
Del City 28 Krebs 7 Pryor 22 Woodward 22
Dewey 8 Lawton 179 Purcell 16 Yukon 38
Disney 0 Lexington 0 Ringling 2
Drummond 9 Lindsay 6 Sallisaw 22
Page 8 Protect and Serve
Measure
Not seasonally
adjusted Seasonally adjusted
Apr.
2010
Mar.
2011
Apr.
2011
Apr.
2010
Dec.
2010
Jan.
2010
Feb.
2010
Mar.
2011
Apr.
2011
U-1 Persons unemployed 15 weeks or longer, as a
percent of the civilian labor force 6.3 5.7 5.5 5.8 5.6 5.5 5.3 5.3 5.1
U-2 Job losers and persons who completed tempo-rary
jobs, as a percent of the civilian labor force 5.9 5.8 5.2 6.0 5.8 5.6 5.4 5.4 5.3
U-3 Total unemployed, as a percent of the civilian
labor force (official unemployment rate) 9.5 9.2 8.7 9.8 9.4 9.0 8.9 8.8 9.0
U-4 Total unemployed plus discouraged workers,
as a percent of the civilian labor force plus dis-couraged
workers
10.2 9.7 9.2 10.5 10.2 9.6 9.5 9.4 9.5
U-5 Total unemployed, plus discouraged workers,
plus all other persons marginally attached to the
labor force, as a percent of the civilian labor force
plus all persons marginally attached to the labor
force
10.9 10.6 10.1 11.2 10.9 10.7 10.5 10.3 10.4
U-6 Total unemployed, plus all persons marginally
attached to the labor force, plus total employed
part time for economic reasons, as a percent of
the civilian labor force plus all persons marginally
attached to the labor force
16.6 16.2 15.5 17.0 16.7 16.1 15.9 15.7 15.9
NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indi-cate
that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged work-ers,
a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons
employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a
part-time schedule. Updated population controls are introduced annually with the release of January data.
Bureau of Labor Statistics
Unemployment Data
Source: US Department of Labor, Bureau of Labor Statistics http://www.bls.gov/news.release/empsit.t15.htm
Remember to keep us updated with your
current mailing address!!!!
Forms available on our website:
www.opprs.ok.gov or by calling our
office at (405) 840-3555.
Spring/Summer 2011 Page 9
Diversifying Your Investments
Historically, a common investment approach has been to invest a portion of your assets in international
equities as a means of reducing the overall volatility (risk) of your portfolio. As the correlation between
U.S. and international stocks has risen over recent years, investors have questioned if the benefits of in-vesting
in international markets are worth the risks. Investment markets have become more global than
ever, emphasizing that investing in international markets can play an important role in a long-term portfo-lio.
Below are a few reasons why it is important to consider investing a portion of your portfolio in non-US
assets.
Non-U.S. equities account for approximately 60% of global market capitalization, thus representing a
significant opportunity set for U.S. investors.
An investor who limits themselves to only U.S. equities excludes more than one-half of the global op-portunity
set.
U.S. stocks are impacted primarily by U.S. economic and market forces while companies domiciled
outside of the U.S. are exposed to different economic and market factors.
Over longer periods of time, investors can increase a portfolio’s potential return & reduced risk by
adding a non-U.S. equity allocation to the portfolio.
Exposure to different currencies can significantly affect the returns for U.S.-based investors. In 2009
and 2010, U.S.-based investors benefitted from the weakness of the U.S. dollar.
Emerging economies are projected to grow faster than developed economies. By 2013 more than
50% of the Global GDP is expected to come from emerging economies.
Non-U.S. equity markets are typically less efficient than U.S. markets, presenting more potential in-vestment
opportunities for investors.
The U.S. equity market has topped the performance charts only once since 1998.
While there is no right answer for all investors, research suggests having an allocation to international
equities can be beneficial to long-term portfolios; the percentage allocated will depend upon the individ-ual
investor profile, risk tolerance, and other unique considerations.
Consultant’s Corner
This is a regular feature in the newsletter from Asset Consulting Group, the financial consultant to the Oklahoma Police
Pension and Retirement System.
CONTACT OPPRS
Mailing Address:
Oklahoma Police Pension & Retirement System
1001 NW 63rd Street, Suite 305
Oklahoma City, OK 73116-7335
Local Phone: (405) 840-3555
Toll Free Phone: (800) 347-6552
Fax: (405) 840-8465
Website: www.opprs.ok.gov
This publication, printed by the Department of Central Services, Central
Printing, is issued by the Oklahoma Police Pension and Retirement Sys-tem
as authorized by its Executive Director. Seven thousand five hun-dred
copies have been printed at a cost of $3135.00. Copies have been
deposited with the Publications Clearinghouse of the Oklahoma
Department of Libraries.
This newsletter is for informational purposes only. Individual
requirements and benefits may differ, depending on circumstances.
Consult the plan provisions or OPPRS for detailed information.
Oklahoma Police Pension and Retirement System Staff
Front row (L-R), Andrea Houston, Judy Cong, Liz Moore,
Dusty Brassfield, Katie Luttrell. Back row, Sean Ruark,
Darcie Gordon, Steve Snyder, Debbie Kearns, Nancy Neth-ercutt,
Marla Hensley
1001 NW 63rd Street, Suite 305
Oklahoma City, OK 73116-7335